An Investment with a Beta of 4

question 174

Multiple Choice

An investment with a beta of 4.0 means that the investment has four times the

• A)average expected rate of return of the market portfolio.
• B)risk of all similar investments.
• C)level of nondiversifiable risk as the market portfolio.
• D)level of diversifiable risk as the market portfolio.

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Definitions:

Surplus

The situation in which the quantity of a product supplied exceeds the quantity demanded at the current price; often leads to downward pressure on prices.

Shortage

A situation in which the demand for a product or service exceeds the supply available at a specific price.

Bushels

A measure of volume used primarily for agricultural commodities, varying in size depending on the product measured.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to sell, holding other factors constant.